Feed cattle carcass weights have tracked a decidedly lower course this winter with the steer/heifer mix 18 lb. lighter since January 1. Winter weather has left a lasting mark on feedyard performance this season as feed efficiency has slipped away and industry production pounds followed lower.
While there are several styles of contracts represented in the library perhaps the take-home message is that there are fewer mysteries within the library than one may have thought. Carcass outcomes are widely emphasized in the contract mix and quality is the largest driver of premiums and discounts.
With beef supplies tighter this year, year-to-date supplies are only fractionally smaller than a year ago. Yet the second quarter promises rapid tightening of fed cattle availability just as spring grilling demand will ramp up. Cattle supplies will be the opposite of robust, and boxed beef values will reflect it with sharp upward moves.
Among cattlemen who understand the math to determine the price for a set of feeder cattle, the question becomes: “How are these feeder cattle bringing so much money?” Mind you, it depends a lot on one’s perspective and sector as to whether or not this conversation comes up. After all, prices are highly variable, as are cattle and regional supply/demand dynamics.
Diving into 2023, the much-discussed beef cow herd culling comes home to roost, bringing on a supply challenge for the beef industry. Everyone downstream from the packer needs to be prepared to see more frequent, potentially wider price spreads for quality within the shrinking supply setting.
Fed cattle prices found a stable range in the past three weeks after making the $3/cwt. upward leap the week of Thanksgiving. Last week’s negotiated cash trade was on a smaller weekly head count and packers kept a lid on the upward price momentum.
Fourth quarter demand for premium quality grade beef carcasses is predictably high. End users—grocery stores in particular—place orders several weeks ahead of the December timeline to fulfill holiday middle-meat needs. Prime grade carcass supplies have disappointed throughout the year with 11.2% fewer total pounds of Prime carcasses acquired so far.
The current cattle markets can provide a history lesson for those new to the scene. To give a quick recap of that era: record-high prices, fueled by a supply chain starved for cattle numbers, came to an abrupt end. This signaled the end of tight cattle supplies, caused by drought liquidation, and beef cattle producers were able to restock the nation’s cow herd.
The brand’s commitment to aggregating winning outcomes is reliant on the relevance of the brand’s carcass specifications to each sector of the beef industry, and ultimately the consumer. This commitment to evolve as the overall industry progresses has resulted in the brand’s recent adjustment of the hot carcass weight maximum to 1,100 lb.
The brand recorded the second largest ever sales volume in fiscal 2022 with total sales culminating in 1.234 billion pounds, a 1.6% increase on the prior year. The sum was narrowly below the brand’s 2019 record 1.25 billion pounds sold.